The UK government has announced its annual increase in compensation limits for certain tribunal awards and statutory payments. The revised limits will take effect from 6 April 2025, impacting claims where the effective date of termination falls on or after this date.
The updated compensation limits include:
- A rise in the limit on a week’s pay (used for calculating statutory redundancy payments and the basic award in unfair dismissal claims) from £700 to £719.
- An increase in the maximum compensatory award for unfair dismissal from £115,115 to £118,223.
- A rise in the minimum basic award for certain types of unfair dismissal (such as cases involving health and safety concerns) from £8,533 to £8,763.
- An increase in the cap on compensation for failure to have a written tips policy, or for unfair allocation of tips, from £5,000 to £5,135.
These changes ensure that employment tribunal awards keep pace with inflation, reflecting the rising cost of living. Employers and employees involved in tribunal claims should take note of the new figures ahead of the 6 April 2025 implementation date.
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